Social Security helps retired people and others with monthly payments in the U.S. A new report shows that these payments might go up by 2.5% in 2026.
This increase is linked to inflation and is called a COLA (Cost of Living Adjustment). Let’s break down what this means, how it’s calculated, and the big changes being planned for Social Security in the future.
What Is the 2026 Social Security COLA?
Social Security payments are expected to rise by 2.5% in 2026. This is the same increase as 2025, but a bit higher than the 2.4% estimate made last month. Mary Johnson, an expert on Social Security and Medicare, said the number could still go up because there are four more months of inflation data to come.
The average Social Security check in May 2025 was $1,948.17. If the 2.5% increase happens, beneficiaries will receive about $40.70 more each month.
How Is the COLA Calculated?
COLA is an annual increase given to Social Security beneficiaries to help them keep up with inflation. It’s based on how prices rise for everyday goods and services. To calculate COLA, the government compares price data from July to September of the current year with the same period from the previous year. If prices have gone up, Social Security payments increase too.
Why the 2026 Announcement Might Be Delayed
The final COLA amount is usually announced in October. But in 2025, this could change because the Social Security Administration (SSA) is under a lot of pressure. Several things could cause delays, including:
- Staff shortages: The SSA has lost 7,000 employees in recent years.
- Increased number of beneficiaries: Nearly 4 million people are now claiming Social Security.
- Financial issues: SSA’s funds are running low and could lead to major budget cuts by 2035.
Tariff Concerns and Inflation
Donald Trump’s trade policies, including tariffs, have added new challenges. Ellen Zentner from Morgan Stanley said tariffs might not show immediate inflation effects, but they could raise prices over time. This long-term inflation can affect future COLA rates.
Plans to Raise the Retirement Age
One of the biggest proposed changes is to raise the full retirement age to 69 by the year 2033. Right now, people born between 1943 and 1954 can retire at 66, and those born after 1960 can retire at 67.
If the age goes up to 69, it could lead to:
- People working longer before they get full benefits
- A loss of up to $420,000 over a person’s lifetime
- About $3,500 less per year for many retirees
The expected 2.5% increase in Social Security payments in 2026 will help many Americans cope with rising prices. However, big changes like raising the retirement age and budget cuts are causing concern. While the COLA provides some relief, the long-term future of Social Security remains uncertain.
With more people needing support and less money available, the government will need to make tough choices soon. Keeping an eye on inflation, policy changes, and the economy is important for anyone planning their retirement.
FAQs
What is the expected Social Security increase for 2026?
The Social Security Cost of Living Adjustment (COLA) for 2026 is expected to be 2.5%, which could add around $40.70 to the average monthly benefit.
How is the Social Security COLA calculated?
COLA is based on inflation. The government compares consumer prices from July to September of the current year with the same months the previous year. If prices go up, benefits increase.
When will the final COLA for 2026 be announced?
The Social Security Administration usually announces the final COLA in October 2025, but delays are possible due to staffing and budget issues.
Will the retirement age increase in the future?
Yes, there is a proposal to raise the full retirement age to 69 by 2033. This would mean people must work longer to get full Social Security benefits.
How could inflation and tariffs affect Social Security?
Tariffs and inflation can lead to higher costs over time, which may increase future COLA adjustments but also raise financial pressure on Social Security funds.
